Post Balance Sheet Events - QS Study
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Post Balance Sheet Events

Events after the balance sheet date are those events, favorable and unfavorable, that occur between the balance sheet date and the date when the financial statements are authorized for issue. It is something that occurs after a reporting stage, but before the financial statements for that period has been issued or is accessible to be issued. It is also known as subsequent events, are one of several types of information that is supplementary to the items appearing on a company’s balance sheet. Two types of events can be identified:

(a) Adjusting events: those that provide evidence of conditions that existed at the balance sheet date (adjusting events after balance sheet date). For example, the company may have estimated inventory and receivables at a certain level at yearend, but a positive review on a popular website resulted in an unexpected spike in sales.

(b) Non-adjusting events: those that are indicative of conditions that arose after the balance sheet date (non-adjusting events after the balance sheet date). For example, the company may have acquired another business, settled a lawsuit, or experienced a significant loss or gain on marketable securities.

Those are the major post balance sheet events performed by the auditors.